If I were you, I would not go to closing until the water problem is
resolved. If you tell your mortgage company about this problem, or the
closing attorney, the closing attorney by law, must hold the
contractor responsible for resolving a problem like this.

Sanjiv, it is really important for you to answer the question about
where your house is located. Is the ground around the ouside of your
house higher and sloping away from the house? NC code says there must
be 6" of slope for 10 feet away from the house so that rain water
drains away from the house.

I have a hard time believing this is ground water, ie, water coming up
from the ground. It hasn't rained here in Trenton, near New Bern but
once in the last 3 or 4 weeks. Probably the same for you so the ground
should be dry.

Check this: turn off all the water valves in your house and then go
watch the water meter out at the curb or whereever it is. Does the
water meter turn still? Measure with a watch, how many gallons over
time? If your water line is running under the concrete footer or under
your house and then up into the wall, the water line could be leaking.
I had this problem with my new home but fortunately, the water leak
was outside the crawl space wall.

I live in an area that is very low except the spot my house is on,
which is about 2 feet above the surrounding low areas. It's about 80
feet from my crawl space to a low area in my back yard that stays damp
and has standing water after a rain. My crawl space is dry as a bone.

If you can sink an iron rod 2 feet in the ground, there is a water
line busted or your house is sitting in a low spot and the contractor
did not build up the area like they should have. The inspector should
not pass final inspection on your house if the soill is not sloping
away from the house, the inspector is your last line of defense.

Please answer as to whether the house is in a low spot, was the soil
built up before they started construction? I've seen this all too
often in North Carolina. I have neighbors with manufactured homes
sitting on flat land which holds a lot of water when it rains. The
contractor did not slope dirt away from the house, of course they
couldn't because they didn't bring in fill dirt and raise the area the
house would be on, which is a must, and the inspector passed these
homes. They don't have plastic on the ground in the crawl space
either. When it rains real heavy for days, their crawl spaces are full
of water. I can't believe how people get ripped off by shoddy
contractors and inspectors that don't do their jobs.

Take a post hole digger or shovel out to your new house. Go outside
the crawl space wall near the area on the inside that has standing
water. Dig a hole 2 feet deep, is there water in the hole? How deep
did you go before water appeared. Next go 10 feet away from the house
and dig another hole, is there water in that hole too? If the hole 10
feet from the house has no water and the soil has sand in it, then
chances are you don't have a groundwater problem because in sandy
soil, the water level will be about the same everywhere you dig,
within limits.